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What is Fixed exchange rate system

Fixed exchange rate system (or pegged exchange rate system): This is a system in which exchange rate of a currency is fixed by government. This system makes sure stability in the foreign trade and capital movement.

   Related Questions in International Economics

  • Q : What is Fixed exchange rate system

    Fixed exchange rate system (or pegged exchange rate system): This is a system in which exchange rate of a currency is fixed by government. This system makes sure stability in the foreign trade and capital movement.

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    State the two sources of demand of foreign exchange: Import of services and goods and to acquire education in abroad.

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    Managed floating rate system: This is a system in which foreign exchange rate is found out by market forces and central bank is a key contributor to stabilize the currency in condition of tremendous appreciation or depreciation.

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    Deficit in balance of trade point: Deficit in balance of trade points out that the imports of good are bigger than exports.